(Image Source: Walt Disney Pictures)
Disney's animated feature "Encanto" initially struggled at the box office four years ago. Produced with a budget of $150 million, the film was widely expected to gross at least $400-500 million to break even, but ultimately earned only $256 million worldwide. However, "Encanto" found massive success upon its release on Disney+, sparking a viewing frenzy and paving the way for a potential sequel.
Two years ago, "Encanto" producer Yvett Merino stated that Disney was indeed exploring ways to sustain "Encanto" as an intellectual property, developing more merchandise and spin-off content, which clearly included the production of a sequel.

(Image Source: TV Tropes)
John Leguizamo, who voiced the character Bruno in "Encanto" (pictured above), recently confirmed to People magazine that "Encanto 2" is actively in development. "I'm waiting for 'Encanto 2'," Leguizamo said. "They're always talking about Bruno, 'We Don't Talk About Bruno' [the song]. I call them every day, 'When are we going to start 'Encanto 2'?' They're working on the storyline, they're percolating."
via: People